Professor Dr. Robert Liftman. "Participation and Financing Societies." Jena, 1909. (A study of contemporary capitalism and the nature of securities) (X + 495).
[compare especially p. 11 of the excerpts]
((The author is an utter fool, going about like someone with a bag occupied with definitions—absurdly stupid—everything revolving around the word "substitution." The factual data are valuable, mostly completely raw. An opponent of the labor theory of value))

p. 104-449: "Descriptive section." Theoretical section = nonsense

number of shareholders
p. 9: - against Sombart for his following "completely along the path" of Ricardo-Marx's labor theory of value. p. 33: "In Prussia the number of shareholders constitutes only 2% of the population." Greater in England and America. "According to an estimate in the 1909 bill on taxation of joint-stock companies, the average sum of shareholding in Prussia did not even reach 10,000 marks. This holding was distributed approximately among 700,000 persons. However, all estimates of this sort are extremely imprecise" (34). "There are no general statistical data regarding the scope of development of capital in securities at the present time... According to Philippovich ("Basics," 7th edition, p. 164) 40% of English national wealth represents "capitals in securities" (i.e., funds and mortgages). Schmoller (statistical appendices to stenographic reports of the stock exchange inquiry commission 189[...])

In America (X) in 1904—107 billion dollars of national property. Approximately

So:
capital in securities  America 35 billion dollars
                       England 26   "      "
                       France  19.5 "      "  58.0 75
                       Germany 12.5 "      "  58 93.0 difference 17
X 5 = 465 billion francs
[and Neymark counts 600]

44: ..."extraordinary entanglement of all economic interests"...

51: "Union" (mining-industrial etc. joint-stock company in Dortmund) ((about it and Stillich p. 38 and 41*)). Founded in 1872. "The joint-stock capital in the sum of almost 40 million marks was issued in 1872; the rate rose to 170%, when the company for one operational year paid out 12% dividend. However, after that the payment of dividends ceased until 1880, and already in 1875 it had (12%-0%) to be undertaken for the first time one of those remedial measures which since then have been repeated almost in every period of unfavorable market conditions... The constant ones who turned out to be the principal losers were invariably the persistent shareholders" **.

"But even in those cases when joint-stock companies upon foundation set themselves not these goals ("speculation in securities"), still it happens that enterprises pursuing other goals, in fact to a greater or lesser extent transition exclusively to speculation in securities. This may occur partly because shareholders are insufficiently interested in the activities of their Directors, and partly because the latter in this regard mislead them" (67).

* See the present volume, pp. 26-27. Ed.
** See V. I. Lenin. Works, 4th ed., vol. 22, p. 223. Ed.

71: In different countries different types of societies predominate:

In America—control over other societies,
Germany—acquisition societies (Übernahme-).
France—capital investment societies.
Holland ("as a rentier state," p. 71)—likewise.
Belgium—à la Germany.
England—capital investment societies (investment trusts)...

Eidels. "The Relation of German Large Banks to Industry." Leipzig, 1905.
Dr. Risser. "Toward a History of the Development of Large German Banks, with Particular Attention to the Tendency toward Concentration." 1906.

p. 117—one of many examples of shareholding of the Belgian "Société générale" (31. XII. 1906—shares and bonds totaling 198 million francs, swarms of societies). p. 136-7. Example:

example of speculation

The Society "London and Colonial Finance Corporation," "which with a basic capital of only 21,745 pounds sterling received in 1890 80,567 pounds sterling in net profit = 370% of capital and paid out 100% dividend."

Capital investment society (Kapitalanlagegesellschaft)—
—"Aktiengesellschaft für rheinisch-westfälische Industrie." Founded in October 1871 (p. 156).

good example

Dividend: 1872—35%—35 !!
NB 1873-1883—0—0
1884-1895—3—9%  1896-1899—10-21%
1900—60%  60
1901—2  0  0
1905-6—40%  40
1907-8—6—4%

Dr. Emil Wolf. "Practice of Financing etc." Berlin, 1905.
Francis Cooper. "Financing an Enterprise." 2 vols. New York, 1906.

Edward Carroll. "Principles and Practice of Finance." 1902 (New York).
W. Lotz. "Technique of Emission Business." In "Schmoller's Jahrbuch." 1890, p. 393 and ff.

"So, from the use of capital investment societies, in order to "ensure profitability for small holdings of large [enterprises]" (X), nothing came of it" (163).

p. 64: "The Cologne banker Louis Hagen was a member of supervisory boards in 35 enterprises; "Deutsche Bank" according to Eidels (XX) had its directors as members of supervisory boards in 101 joint-stock companies, besides which in 120 companies its own supervisory board members" (p. 64).

(X) Jörgens, pp. 45-6.
(XX) Eidels. "The Relation of German Large Banks to Industry." 1905.

Securities are issued many times over by different societies on the same property.

Example (American)... "their (these railroad companies') inventory capital is repeated 5 times in the capital in securities of companies, under the direct or indirect control of which they stand" (182).

Ch. A. Conant. "Tendencies of Contemporary Banks" ("Bankers' Magazine," 1905).

1000% and crisis

The Society "Northern Pacific Railway Company." Capital = 80 million dollars in founder shares. Struggle between Harriman and X ill. X ill acquired 15 million in founder shares. "Thanks to this "raid" (attack) the rate of shares of the "Northern Pacific Railway Company" was driven up almost to 1000%... 9. V. 1901 a stock exchange crisis broke out, thanks to which a large quantity of small people were ruined, while

(new technique) 500% dividend...
(italics mine) NB
italics of Liftman)

as principal participants, according to Harriman's testimony, did not suffer any losses in this manipulation (CORNER)" (184).

"With further contemporary development of capital in securities, the methods by which one can take from the public significant sums of money and pump them into one's own pockets have become somewhat more refined. The means for this now serve the continuous foundation and piling up of one upon another ever new societies, to which the same inventory property is again sold or leased, and among which this property is all the time circulating" (186).

In 1900 the "Standard Oil Company" was founded.

"Its charter capital consisted of 150 million dollars. Ordinary shares were issued in the amount of 100 million and preferred shares in the amount of 106 million. On these latter dividends were paid in 1900-1907: 48, 48, 45, 44, 36, 40, 40, 40%, totaling 367 million dollars. From 1882 to 1907, 889 million dollars of net profit was received; of this, 606 million were paid in dividends, and the rest went to reserve capital" * (212).

"At all enterprises of the society" (Steel trust) "in 1907 there were no fewer than 210,180 workers and employees... (1908—165,211)... The largest enterprise of German mining industry, "Gelsenkirchener Bergwerks Gesellschaft," had in 1908—46,048 workers and employees, in 1907—43,293" ** (p. 215).

"Internationale Bohrgesellschaft" (in Erkelenz)... "It was founded for the purpose of applying the drilling method invented by engineer Anton Raky... (235)... the society paid out for 1905-6 and 1906-7 500% dividend" (236).

* See V. I. Lenin. Works, 4th ed., vol. 22, p. 191. Ed.
** Ibid. Ed.

"In general experience shows that it suffices to own about 40% of the shares of an enterprise giving voting rights in order in normal periods to keep control of it in one's hands" * (258). And then there are still (in America particularly) "shares not enjoying voting rights" (259), and bonds etc.—and if these are shares of a company controlling a number of other companies, then "he (the capitalist) can with his own capital of 5 million dollars dispose of capital 40-50 times greater" (259).

...and even "80-100 times greater" (than he owns) "a mass of capital" (260)...

"Trade in metals, except iron, in particular trade in copper and zinc, as well as in precious metals, in Germany and in other major countries is completely exclusively concentrated" (301)... "a small number of firms" (mostly in private hands)...

..."very many German gas plants of an earlier period were built by English enterprises and on English capital"... (321)...

..."only relatively few have achieved virtuosity in this sphere" (335)—in financial matters etc.

..."The Swiss Credit Institute itself manages it" ("the bank for electric enterprises" in Zurich), "because the 'bank' is not an institution, an institute, but, like all societies of this kind, represents, so to speak, a large folder, in which are kept the funds belonging to it and several account books" (376)...

"Allgemeine Elektricitats Gesellschaft" (AEG)
—shares—100 million marks
—bonds—37  "     "
—"holding of funds"—23  "     "  etc.

Gold fields in South Africa. "Monstrous profits obtained especially in the late 80s and early 90s served as a stimulus for the acquisition of shares in mines not only for English capital, but alongside it in the first place and for French, as well as for German, Belgian and Dutch capital.... An extraordinary inflation of rates reached its highest point in the period of "boom," which ended in 1895. The subsequent fall in the rate of mining securities was later further intensified in connection with the Transvaal War"... (414).

"The more developed a national economy, the more it turns to more risky or to foreign enterprises, to those which require an extended period of time for their development, or, finally, to those which have only local significance *. These are precisely the areas for which special financing societies were created: enterprises, for the development of which an extended period of time is required, such as, for example, railroad and mining enterprises"... (etc.) (434).

[The more developed, the riskier... NB]

Almost literally repeats this Schulze-Gaevernitz in the article "Banking," p. 21. (Book III. "Foundations of Social Economics." Section V, Part II.)

"When the center of gravity of economic activity proper is in the subordinate societies, and the principal society is only the owner of their funds, and the shareholders are in complete ignorance regarding the activities of the subordinate societies, as happens in American controlling companies, then it is clear that all provisions of law aimed at ensuring the greatest possible public control over the conduct of affairs by these enterprises can be paralyzed. Such danger can exist for all societies formed with substitution (replacement) of the funds of other societies, and even with any significant participation of one enterprise in others" (439). "At the end of 1904, 3.8% of all limited-liability companies owned capital in excess of 1 million marks, 9.1%—capital in excess of 500,000 marks each. At the same time the capital of the above-mentioned 3.8% of companies constituted 45.2% of the aggregate capital of all limited-liability companies, and 9.1% of companies owned 60.5% of this capital" (459).

(In Germany? Obviously.)

460: The author's project: to oblige companies to "report" in statements such sums of funds as > 1/20 "of contributed shareholder capital."

((Idiotic bureaucratic nonsense!))

"Mankind probably faces in the near future again major upheavals in the sphere of technique, which will manifest their effect on the organization of the national economy as well." ...Electricity, aeronautics... "Usually and as a general rule in such times of fundamental economic change, strong speculation develops*, and on the basis of previous experience it is beyond question that in this case the principle of substitution (replacement) of funds and participation and financing societies will play a significant role in the implementation of the major capital investments becoming necessary" (465-466)...

But supposedly... the "youth periods" of capital in securities are already past. The public has grown wiser... And with major technical inventions "Gründungsschwindel" ("flotation swindels") "hardly likely" etc... (466-7)... ((a "harmonist"))

..."the essence of commerce in general is substitution of demand"... (475)

((ha-ha! A "theorist"!))

..."commerce is an industrial activity directed toward the gathering of goods, their storage and making them available for distribution" (476). ((Italics and bold type. An idiot!)) **

Nothing in theory

The End

* See V. I. Lenin. Works, 4th ed., vol. 22, p. 197. Ed.
** Ibid., p. 215. Ed.

"DIE NEUE ZEIT," 1911 (ON WAR NB) AND 1912 (AMONG OTHER THINGS ON UNITED STATES OF EUROPE)

"Die Neue Zeit," 30th year of publication (1912)

[NB. Here also an article on the history of private fortunes in America.] 30th year of publication, 1 (X. 1911-1912)

Articles by Varga (p. 660), Hilferding (p. 773), and Kautsky (p. 837 and ff.) on gold, commodity, money.

On the same subject Otto Bauer in the 30th year of publication, 2nd volume.

NB also, p. 1, "Bandit Politics" (6. X. 1911)
Kautsky's article on the occasion of the Tripolitan War
ending with the words: "It (our electoral struggle) can overnight transform into a struggle for power" (p. 5).

30th year of publication, 2 (1912)

Articles by Pannekoek ("Mass Action and Revolution") (p. 541 and ff.) and Kautsky. "New Tactics" (2. VIII. 1912 and ff.) with filthy passages about ministries etc. (the vilest opportunist article). [NB before Basel.] Radek "On Our Struggle Against Imperialism" (p. 233).

[Here also polemic between Lench and Kautsky on disarmament. NB]
[Here also articles by Eckstein also against Pannekoek] [Pannekoek's article: "The Essence of Our Contemporary Demands," p. 810.

Specifically on the question of the "feasibility" of demands.

"Why in fact are political democracy demands, national militia, democratization of justice etc., which all taken together are unfeasible under capitalism, included in the program, and not the right to labor or the prohibition on the introduction of machines reducing the number of workers required, which is also unfeasible under capitalism?" Two types of impossibility: "economically impossible" and "politically excluded" (811). The demands of the given moment are "not in an absolute sense" unfeasible under capitalism (812).

"Die Neue Zeit," 1911, 2 (29th year of publication).

pp. 248 and 276. A small "polemic" between Karl Kautsky and "Leipziger Volkszeitung" (Rosa Luxemburg) over the United States of Europe—notes not touching on the substance of the matter, but indicating the polemic being conducted in the "Leipziger Volkszeitung."

"Leipziger Volkszeitung" also attacked Ledebour for his phrase:

"We set... to capitalist society... the demand... that they (statesmen) in the interests of capitalist development of Europe itself prepare this unification of Europe into United States of Europe, in order subsequently to prevent the final ruin of Europe in world competition" (p. 276).

This supposedly is the same as what Calver said defending the customs union against America.

Kautsky replies: no, this is not the same. In Ledebour there is not a word about customs struggle, only about United States of Europe, "a thought, the point of which... is not necessarily directed against the United States" (277). ((An idea of peaceful competition, then!))

Karl Kautsky, p. 248, says that for the United States of Europe stood (or stood) both Parvus and Johann Philipp Becker.

Ibidem, p. 943-4 (29. IX. 1911), a report on an article by G. Quelch (in "The Social-Democrat," 1911, August), who says that capitalists too are for peace (capital is already international): capital can already create "United States of the world (NB: sic! "der Erde"), but this world trust will oppress workers even more. "Capitalist universal peace... all-powerful international police, complete absence of the right to political asylum... in this state of slaves there would reign peace and calm"... (p. 944).

From war Quelch (contrary to Karl Kautsky) expects not revolution but economic prosperity, deliverance from "pressure of production."

"Die Neue Zeit," 1911, 2 (29th year of publication, 2nd volume), No. 30,
28. IV. 1911 (pp. 97-107).

Karl Kautsky. "War and Peace."

In this article Karl Kautsky speaks in favor of propaganda for peace and for the United States of Europe (§ 3 of this article is even headed: "United States of Europe").

Karl Kautsky against the proposal to decide in advance the response to war by strike (here is the place which he cited in 1915, claiming that the people ("die Bevölkerung"), the "crowd" themselves would kill those opposed to war if they thought borders were in danger, feared invasion—p. 104 etc. etc.).

But, citing such places from this article of 1911, Kautsky did not cite in 1915 the following passages:

1) In § 1: "Dynastic War and Popular War." NB ((emphases mine)).

..."In the 18th century princes considered states simply as their patrimonial domains...

...So now capitalists of different nations of Europe (and of the United States) view different nations standing outside European civilization as their patrimonial domains, and contradictions between different capitalist governments arise only from the striving to increase or round out these domains—colonies and "spheres of influence." Just as dynastic contradictions of the 18th century. And the welfare of European peoples at the present time is involved in this no more than two centuries ago"... (p. 99).

2) "The conviction grows that a European war with natural inevitability must end in social revolution. This serves as a strong, even perhaps the strongest stimulus for the ruling classes to observe peace and demand disarmament" (p. 100).

3) "After war with irresistible necessity follows revolution, not as a product of social-democratic planning, but by the force of the iron logic of things. Contemporary statesmen themselves take into account the possibility of this outcome" (p. 106). ..."Will revolution be the result of competition in armaments or the result of war—in any case it will be an international phenomenon" (p. 106)...

..."But even if revolution does not arise as a result of reaction against the burden of armaments or against the horrors of war, but occurs for other reasons, and if it is not initially international but will be limited to the bounds of one state, then under contemporary conditions such a situation cannot last long. It (the revolution) must spread to other states"... (107), and from this Karl Kautsky draws the conclusion about the United States of Europe "and their transformation ultimately into the United States of the entire civilized world."

p. 105: Karl Kautsky defines the United States of Europe as a union "with a common trade policy" (+one parliament etc., one army).

In § 1 of this article (p. 97) Karl Kautsky characterizes "the change in the world situation" ("over the last 2 decades")... "Industrial capital has transformed into financial capital, it has united with monopolist landowners" "Social reforms have completely stagnated"...

"And yet" (despite all difficulties of implementing the United States of Europe) "the striving for peaceful unification of the states of Europe into one federal whole is by no means hopeless. Its perspectives are bound up with the perspectives of revolution" (italics of K. Kautsky, p. 106).

"Die Neue Zeit," 1911, 2, p. 96: a summary of an article by Otto Bauer in the collection "Struggle" (1911, No. 3): "World war is his" (capitalism's) "last word... If the Turkish revolution leads to a general European war, then the inevitable result will be European revolution."

"Die Neue Zeit," 1911, 2, p. 179

An article by Rothstein on the Congress in Coventry (1911), where the British Socialist Party adopted a resolution for "maintaining a fleet of sufficient size for national self-defense."

..."By this very fact the party congress not only abandoned the ground of international social-democracy, but actually joined the worst jingoes" (p. 182)...

against the agitation of Hyndman

"However aggressive Germany may be, its aggressiveness is directed at objects which for the English people have as little significance as the gold fields in the Transvaal... But if, on the other hand, one approves or permits those actions of the English ruling classes which are expressed in the policy of encirclement directed against Germany (etc.)... then indeed a moment can come when even the proletariat will be forced to take up arms and, defending its country, serve the cause of the capitalist class"... (p. 183).

"Die Neue Zeit," 1911, 1, Askyu's article on English colonial policy in Egypt,